Sports Direct (LON: SPD) has fired the former directors and senior management of House of Fraser.
Just two months after buying the collapsed department store in a £90 million deal, Mike Ashley announced the news in a stock market statement.
“Following the collapse of House of Fraser on August 10 2018, and subsequent calls for an investigation into the circumstances of that collapse, the company today announces that we have dismissed the former directors and senior management of House of Fraser.”
Since his purchase of House of Fraser in August, Ashley has negotiated with landlords around Britain and managed to save 20 House of Fraser stores from closure, saving about 3,500 jobs.
Stores in Edinburgh, Hull and Swindon will close and the store in Bath is still at risk of closing as Ashley continues to negotiate with the landlord.
The Sports Direct boss has blamed “greedy landlords” for the job cuts.
“Some landlords are being very collaborative in order to give us a chance at turning the business around, giving House of Fraser a lifeline and saving hundreds of jobs,” said the House of Fraser spokesman. “However, some greedy landlords would rather see the stores close than help save the jobs of hundreds of people. We will continue to try and convince these landlords but ultimately time is running out. Some closures will be announced.”
Richard Lim, the chief executive of consultancy Retail Economics, said: “Drastic action has been taken following a series of woeful management decisions, clumsy execution and an outdated perception of the UK market.”
“The new management team will need to prioritise right-sizing initiatives and utilise any excess space to sweat assets more effectively in a move become fit-for-purpose in today’s digital age.”